The Dangote Refinery in Nigeria, Africa’s biggest, with a capacity of 650,000 barrels per day (bpd), has been commissioned, but full-scale production, including production of gasoline for Europe, is not expected to begin until the second half of 2024, analysts have told Bloomberg.
After years of delays and massive cost overruns, Nigeria finally saw the giant oil refinery commissioned in May. The Dangote Refinery, built by the group of the same name of Africa’s richest person, Aliko Dangote, was inaugurated by Nigeria’s former President Muhammadu Buhari before he left office at the end of May.
The government hopes the new refinery will alleviate a chronic fuel shortage that has turned Africa’s biggest oil producer into a fuel importer. Nigeria, OPEC’s top crude oil producer in Africa, has had to rely on fuel imports due to a lack of enough capacity at its refineries, some of which had to undergo refurbishment in recent years.
The refinery has cost around $20 billion, up from initial cost estimates of between $12 billion and $14 billion.
The huge refinery will be able to meet domestic fuel demand and even have some part of the fuel left for exports.
The Dangote refinery expects to export diesel to customers in Europe, as well as gasoline to Latin American and African markets.
However, production of Euro V gasoline, the fuel complying with Europe’s emissions standards, is not expected to be produced until late next year, according to analysts at Facts Global Energy.
The refinery will initially produce lower-quality refined petroleum products, including fuel oil, the consultancy told Bloomberg.
Analysts are uncertain when the huge refinery will start full commercial operations, but representatives of Dangote Industries have told Bloomberg it would not be correct to say that a full ramp-up would take several months.
At any rate, the refinery is “too big to fail, so it is a question of when, not if, it will begin commercial operations in some form,” James McCullagh, executive director at downstream specialists Citac Africa, told Bloomberg.
By Charles Kennedy for Oilprice.com
